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Competitiveness of Oil Palm Production Systems in Nigeria: A Policy Analysis Matrix Approach

Author: Abdul-Qadir, M. I, Okoruwa, V. O. and Salman, K. K.

Publisher: International Journal of Hybrid Information Technology

Abstract

There is demand-supply gap in palm oil production in the country, coupled with nonattainment of self-sufficiency in palm oil production in the country. Therefore, this study evaluates the competitiveness of oil palm production systems in Nigeria using policy analysis matrix. Data were collected with multistage sampling procedures through the administration of well-structured questionnaires. The results showed that oil palm production in Nigeria is classified into small, medium and large scale systems and the three systems are competitive in the production of palm oil and palm kernel under existing market prices. The private profits for the three production systems, the large, medium and small scale were N1, 131,350, N 607,443 and N 99,640 respectively, which indicates that the large scale system is more competitive at private levels followed by medium scale system. The social profits for small, medium and large scale systems were N 773, 649, N 1,023,067 and N 1,417,059 respectively, which implies comparative advantage of all the systems confirmed by DRC of 0.3806, 0.3639 and 0.2668 for small, medium and large scale systems respectively. Thus, Nigeria has comparative advantage in palm oil production for export. The net transfer and subsidy ratios were negative, which display poor protectionist policies and overall transfer of resources away from the production systems. In this study, it is concluded that palm oil production in Nigeria is competitive at private and social levels.